Solve the mystery: differentiate B2B vs B2C product management

We often hear that being a product manager for B2B products is an entirely different role from product management in a B2C environment. But that isn’t always the case. One of the most common myths about the difference between B2B vs B2C product management is that when you’re developing products for businesses, you have to always satisfy multiple personas across the organization; when designing for consumers, on the other hand, you need only to create a value proposition for a single, end-user persona. This isn’t always true. Here are a couple of other reasons we believe that being a product manager and designing products for any type of market — B2B, B2C, and even B2G — will, for the most part, require the same priorities, knowledge, and skills.

Business Model

A major distinction between B2C and B2B products is the business model.

In B2C… revenue is generated from thousands of customers making millions of small transactions. Whether it be subscription, purchases, or micro-transactions, this is how the business makes money. Even a business with whales — where a small cohort of customers generates a majority of the product’s revenue — still needs to rely on creating a great experience for everyone (more on this in a moment)

In B2B… revenue is generated from a small handful of large enterprise contracts. These can be 6+ figure annual contracts. Having significantly fewer customers completely changes the dynamics for product.

The Sales Funnel

In B2C, most companies will use marketing to generate as many impressions and initial conversions as possible, and it is up to Product & Design to funnel these new users down to paid conversions and keep them around. B2C Products can get thousands of hits a day, keeping the funnel fully stocked (and ideally growing) at all times.

b2b vs b2c product management

In B2B, large meaningful contracts take a long time to develop. People may impulsively buy a $20 T-Shirt online from a B2C store; no company is impulsively signing a $250K annual contract for BI software. The typical enterprise sales cycle is 6–12 months (and from my experience 6–8months is insanely fast). This means it is up to Sales to nurture these contracts and bring them to the finish line. Product plays a fundamental role in this process by providing (at a minimum):

  • A Sales Deck with screenshots
  • An internal-only sales enablement deck with more technical slides and pricing
  • One pager and blog posts/whitepapers (if available)
  • General advice and support for Salespeople on technical inner workings of product
  • 1–3 year (tentative) Product Roadmap so they can evangelize a long-term relationship with customer

Ride alongs to Enterprise sales calls somewhat mimics B2C ethnographic interviews, but from my experience Enterprise sales calls provide significantly more signal & insight into product needs than B2C calls; most likely because enterprise lacks the quantitative data a B2C sales funnel can create.

Customer Problems

At its core, Product Management is about solving Customer Problems. Good PMs can quickly figure out who they are building for and why.

But for B2B, this becomes a little more complicated because Enterprise Users are typically not Enterprise Customers.

For B2C products, like a mobile app, your users are also your customers, since the people playing the same on their phone (users) also bought the app themselves (customers).

But B2B products, like BI software, would have employees who use it every day (users) and their boss who paid for it (customer). Their boss may never touch the software, they just need a product to help their team achieve their goals.

Similar to B2C customers, B2B customers also require simple, flexible and fast processes. In that case, have a look at Grit Global. A Magento B2B platform that offers you multiple channels, flexibility in creating customizing catalogs, prices as well as Comprehensive Inventory Management Features. All kinds of features in one but still guarantee fast speed and simplicity. You will not have to worry and do tasks on your own with this genius invention. 

Conclusion

In the end, the nuances of B2B vs B2C are trumped by the fundamental product management skills. If you are an exquisite interviewer, have strong feature prioritization skills, and deep industry and product knowledge, then the differences between the two markets will all but disappear. But it is still crucial to adapt your tried-and-true B2C framework to B2B, so as not to miss the points mentioned above.


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